Europe is a pretty big place with little consensus on anything. Perhaps you should ask, 'How should you market your Web 2.0 application in the UK?', 'How should you market your your Web 2.0 application in France?' etc etc. The answers may be mostly similar however the differences could be very compelling.
You're right about that, but at the same time, this is also exactly the problem. If you aren't going to be able to take up the Luxembourg market without paying particular attention to the cultural and linguistic peculiarities of Luxembourg (hint: 3 languages), then the conclusion for many companies is going to be that it's not worth worrying about Luxembourg at all. Then again, if nobody worries about Luxembourg, that opens up a decent opportunity for somebody to just copy a bunch of existing ideas for the Luxembourg market. And that's why people are looking for ways to overcome the problem of cultural fragmentation and make it profitable, even for a small company, to target the European market.